2023 Market Indicators Turn Positive (But Interest Rates Climb Again). After the acute decline in market activity occurring in the 2nd half of 2022, buyer demand rebounded dramatically and most market indicators turned positive in early 2023: Open house traffic, number of offers, and overbidding and absorption rates all saw improvement.
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Early 2023 Data Suggests Buyers Are Beginning to Jump Back In. December is typically the month that sees the year’s lowest level of deal-making activity – i.e. listings accepting offers (going into contract) – which leads to January usually posting the lowest monthly number of closed sales. (Sales typically close 3 to 6 weeks after going into contract.)
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In 2022, the market saw a dramatic shift from Q2 (spring), at which time the market peaked after a dramatic 10-year upcycle supercharged at its end by the pandemic boom, through the 2nd half of the year, when the market cooled significantly. Prompted by a number of economic factors – especially inflation and interest rates, and financial markets – this played out in substantial declines in sales volumes, median sales prices, appreciation rates, and virtually all the standard measurements of buyer demand.
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The changes in market dynamics that began in late spring/early summer 2022 generally
continued in autumn due to the ongoing economic headwinds, including high inflation and
interest rates, reduced consumer confidence, and volatile stock markets, though all have
fluctuated significantly over the period, and some readings have recently improved.
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After a brief rebound in market activity in August, pursuant to what turned out to be a very temporary decline in interest rates and an associated rebound in financial markets, macroeconomic conditions shifted again – with interest rates climbing rapidly to a 20-year high – which took a toll on early autumn, Bay Area real estate markets.
Virtually across the Bay Area, Q3 median sales prices retreated dramatically from their spring peaks, and SF was hit harder than most area markets. Part of this was due to seasonal trends – median sales prices often peak for the calendar year in Q2, then drop in summer – but part of the decline was clearly due to changing market conditions prompted by shifts in interest rates, inflation, stock markets, and consumer confidence.
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In early August, we mentioned agents reporting that buyer activity – renewed interest in getting back into the market, visits to open houses, and so on – was picking up due to a number of issues: Price reductions, less competition, the drop in interest rates, and the dramatic recovery in stock markets. And a small rebound in SF sales did show up in August data – sales usually tick down in August from July – though volume was still well below last year.
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Across the Bay Area, markets have continued to slow and cool. As illustrated in this report, dramatic changes in demand, inventory, overbidding, price reductions, and year-over-year appreciation rates have usually occurred.
The post San Francisco Home Prices, Market Conditions and Trends August 2022 first appeared on Paragon Specific.
Leaning into market headwinds, year-over-year appreciation rate falls. The impacts of this year’s severe economic headwinds – soaring inflation and interest rates, stock market declines, fears of recession – on Bay Area real estate markets are speeding up.
The post San Francisco Home Prices, Market Conditions & Trends July 2022 first appeared on Paragon Specific.
Sales are declining, and the numbers of active listing and price reductions are increasing. But the homes that are selling are still, on average, selling for well over asking: Median sales prices and year-over-year appreciation rates remain high.
The post San Francisco Home Prices, Market Conditions & Trends June 2022 first appeared on Paragon Specific.
